Debts

Learn how to calculate credit card debt

15/10/2012

Postpone card debt is common among consumers, accompanying the growth of debt in the snowball effect
 
SAO PAULO - The budget is tight and you believe you will not be able to pay off the bill your credit card this month. In the next, possibly, your salary will be insufficient to pay the accumulated value of two months and thus tend to increase their debts, in effect "snow ball."

Many people end up in this situation because they do not understand exactly how cards work, and believe that by paying at least the minimum, do not have to pay interest, which is not correct! To better target consumers in this regard, ABC (Brazilian Association of Consumer) revealed step by step, as a debt on the card is made. Be aware of and avoid problems.

At the tip of the pencil
To better illustrate the evolution of the debt of a credit card, we will take as the base case of a person who possesses outstanding balance of R$ 1,500, and whose rotary card charges interest of 10% per month.

If you choose to make only the minimum payment, this person will have to pay only R$ 300 of the total invoice (usually the minimum is set at 20% of the invoice value). In this case, the balance of the bill that would have to be funded, not having been paid, would be R$ 1,200.

This amount will be increased charges for the late payment of debt financed. Besides the rotary interest, there is still a delay penalty (2% per month), default interest (1% per month).

Calculating the respective values, it has the interest of rotating at R$ 120 (R$ 1,200 x 10%), the fine for delay in R$ 24, and the default interest on R$ 12. In other words: almost R$ 160 in charges only.

The following month, so your debt before R$ 1,200 on the card, now worth about R$ 1,360 (R$ 1,200 + R$ 160). If, for once again, you can not pay off the entire bill and you have to pay only the minimum amount (20% or R$ 272), it is good to know that, on the balance, R$ 1,088, will be recalculated every charges mentioned above.

Note that in this example it is assumed that no new spending the following month, which is almost unlikely, since the use of plastics has become increasingly popular among consumers. In this sense, think that the real debt may be even higher, amounting to new spending in the month.

Also, please note that in January 2008, according to the IRS, the revolving credit IOF started to pay the daily rate of 0.0082% compared to 0.0041% in the previous rule. In addition to this increase in the amount charged per day, operations have now extra incidence of 0.38% on the total transaction, regardless of the term.

Breaking the card may be necessary
The scenario discussed here makes it clear why you have to get away from paying the minimum card frequently. If you notice an accumulation of debts, do not think twice about breaking the card to avoid new spending. Look for the issuing bank and try to negotiate more flexible payment terms.

A hint as to whether the proposal received from the company is really advantageous: submit invoices for preparation of accounting expertise, a situation in which it becomes possible to eliminate any risk of illegal collection of interest and abusive. In the latter case, the consumer must seek justice, because while a debt is discussed in court, you can not be taxed by defaulting to the point of having the name included in the lists restrictive credit protection.

Finally, do not forget the maxim that certainly always will be the best tip to avoid the lack of financial means the sum of your expenses never exceed the value of their income. Make an extra effort to try to save a percentage of salary in order to establish a reserve fund for emergencies.


Source: News Agency

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